tv This Is America With Dennis Wholey WHUT May 15, 2011 9:00am-9:30am EDT
>> the u.s. korea free trade agreement has been in the works for about five years and its moment of truth is just about here. on this program, we will talk with laurel lane, the aide said director and head of international affairs for citigroup and co-chair of the u.s.-korea fda business coalition. also, we will talk with the minister of economic affairs at the korean embassy in washington, d.c. this is america. "this is america" is made possible by --
the national education association, the nation's largest advocate for children and public education. the american federation of teachers, a union of professionals. poongsan corporation, forging a higher global standard. and the rotondaro family trust, the ctc foundation, afo communications, and the american life tv network. >> for the person on the street, what is it all about? >> this is an agreement about
making trade between the u.s. and korea fair. it is about giving you opportunity is coming to u.s. companies in that market. there are a lot of barriers that have existed for a long time in international trade. with this agreement, the two governments have gotten together to figure out ways to eliminate a lot of those barriers, lowering the tariffs, creating new opportunities, an agreement that will mean jobs and new opportunities for u.s. companies and partnership with korean companies. >> you mentioned jobs. that has been a huge sticking point for some people. our country is hurting right now. an agreement with another country, the jobs will go overseas, the businesses will set up a broad, and we will lose jobs. how you handle that? >> here are the facts. and if i% of the consumers live outside of the united states. american cup -- 95% of the consumers live outside of the
united states. american companies need to tap that market. agreements that give us access to those consumers are beneficial to creating jobs here in the u.s. i look at all of the free trade agreements that have been negotiated and the ones that are pending approval, including the kory agreement, as ways to stimulate job growth. in fact, there have been studies done -- they are all estimates and done on these models -- but the conservative estimates is that the agreement could generate 70,000 new jobs. at a time when the economy is hurting, those of the kinds of numbers you want to be generating. that is a conservative estimate. this agreement will create more jobs because there is a lot of opportunity in the korean market that we have not been able to tap it because of the high tariffs, because of the barriers there. >> we have been sending product over there. they are a big trading partner with us right now. >> absolutely.
$38 billion in exports in 2010, it is -seventh largest market for us. but imagine how much more that market could be. >> if the prices would go down over there. >> we have the products that can compete over there for did not have to pay those tariffs. >> five years in the making, something like that, as i kind of kiddingly say, these are to countries that are friends and we have had a lot of trouble in beef and autos. cars have been big sticking points. how have those been resolved? >> on the timing issue, it has been five years. but if there is something that i have learned is that good agreements take time to craft. you have to get a lot of the stakeholders together in a room and make sure you are reaching the right agreement with the right commitments in it appeared on those and beef were
an important issue, a set of issues that did need to be addressed. the obama administration took a hard look at some of the concerns from those particular industry sectors. on august, it worked with the korean garment to really ensure that u.s. autos had the access in the market. if there were concerns down the road, there would be opportunities to readdress of them if the agreement was not working as it was intended to. beat, they are still talking about that. >> that is off the table now. >> there are safe discussions occurring between the u.s. government and korea, which is what this agreement is based on, encouraging dialogue and a encourage more trade. i do not think it is completely off the table. i think the korean government and the u.s. government want to figure out ways not only to realize the benefits that are already in the agreement for beef, but figuring out ways to
grow that market for their. >> i should say out loud that there were concerns on the part of the korean government, i guess, and the korean people about accepting our be. >> yes. >> as far as the auto industry, they sell a heck of a lot of units here in the united states and we are selling a few thousand over there. has the playing field level, so to speak? i know that ford is now on board. the uaw is now on board. those are big things. >> those are huge things. that has changed the whole dynamic with respect to this agreement. we have to make sure that these commitments that will be implemented are lived up to, so to speak. i think they will enable u.s. automakers to sell more cars in the market. why? because a lot of the long term -- a longstanding, non-tariff
barriers, some of the standards issues that kept u.s. autos out, some of the regulations that made it harder for the u.s. model cars to succeed in that market or to clears through some of the real tory hurdles, the u.s. government tackled as a some of the regulatory hurdles, the u.s. government tackled those. i am hopeful. i am hopeful that they will succeed. >> some time ago, the u.s. chamber of commerce was not on board. but they are enthusiastically on board. you are also a co-chair something called the u.s.-korea fda business coalition. someplace here -- i do not know where it put it -- i have a list of everybody from johnson and johnson to cargill to ups to target to home people -- they are all on board on this thing.
hundreds of companies, u.s. companies supporting this free- trade agreement. >> this is a big win for in a lot of companies, not just the big companies, but the small and medium-sized companies recognizes agreement with opportunities that they did not have before. we found it pretty easily to get the membership to this coalition to unite together to advance congressional passage of the agreement. but 1000 companies -- >> 1000? >> it is bigger than any coalition ever created before on free trade agreements. it is because this agreement is so powerful and it means so much to companies across the board. that is every industry sector. it is agriculture, services, manufacturing. it is a powerful coalition. >> this agreement is important for the united states's position in asia. it is not just exports and
imports, that kind of a thing. help me understand that a little better. >> of this agreement is, in some ways, more than just an economic agreement. it is about showing u.s. leadership in the region. the chinese government has negotiated a lot of deals with negotiating partners in the asia area. we believe in strong intellectual property right protection. we believe in investment protection. and we believe that making sure that terrorists are eliminated across the board, not just the politically-interested categories. this will help to set a u.s. standard in the region. it also shows the u.s. commitment to a very important ally. we have no stronger ally than korea in the region. we have others in the region, but korea is a very powerful ally in the region.
we trade with them as well. they are important economic partner as well. i believe economic partnerships forged some of the strongest friendships and bases for trust. that is a very powerful message in the region, to have the u.s. and korea standing side by side with the same kind of standards, with the same kind of partnership. >> so where do we stand now as far as this going before -- does it go to the senate or to the whole congress? >> the president has sent forward a letter saying that he wants to bring in the technical discussions on the legislation that translates to the agreement into law. >> ok. >> there will be a technical discussion on that. there will be a walkthrough on the committees on the house side and, subsequently, on the senate side. ultimately, it will be voted first on the house side and then on the senate side. then it will hopefully go to the president to be signed into law.
>> that may happen in june or july sometime? >> time is of the essence. we are hoping july. a lot of other countries are negotiating deals. one in particular is the european unit, the regional grouping of 27 european countries. they closed their deal with korea. their agreement goes into effect july 1. we have to make sure that the u.s. is not out of the benefits of our own agreement so we can compete on the same terms as our european competitors. we have to get this deal done before the end of july. i am hopeful and confident that we will get there. >> good for america and good for korea as well. how is it good for korea? >> this is a very important agreement for a career as well. we are involved in a lot of global supply change with korean companies. we have great partnerships between u.s.-korean companies providing products to third party countries. i think they recognize the
benefit of bringing in high- quality u.s. products and services. they open their market for the first time in telecommunications, legal services, and health services. clearly, the u.s. has a competitive advantage in many of those areas. they are looking for high standards that the u.s. companies bring to their market. >> good for the financials as well? >> absolutely. the reason it is good for us is not just because the commitments made to respect your financial services, but we are an american world wide bank. why are we worldwide? because our clients are worldwide. american companies that are exporting and investing in korea need to have their bank with them. this agreement makes it possible for us to provide them those banking services and allows companies to grow. when our clients can grow and trade and invest more, city benefits -- citi benefits.
this is good, not just for us, but for the clients as well as the entire u.s. economy. however we are involved, we are in the economy. >> we are at a time. thank you for your education and thank you for your passion. >> thank you. >> thank you. what does the ft a need to korea? >> basically, the free-trade agreement is something that aims to remove any barriers to the free flow of goods, services, and sometimes human beings. it is meant to increase trade flows between the countries concerned so that it will be helpful for these countries to be more prosperous.
it also goes beyond the economic and trade aspect. korea is the staunch ally of the united states in east asia. korea, as you know, is a by- front democracy. they share the values of democracy, free markets, and human rights. it goes beyond trade and the economy aspect. the free-trade agreement was implemented in both countries. it will be a big boost for volatile relations in east asia, which is the most vibrant and fastest-growing region in the world. if you just look at the benefits that comes from the elimination of tariffs that both countries levy on each other. >> if you send something over
here and we sense of they are there, there are taxes on them. why has this taken so long? it has been in the works for five years or so. >> there are several things that have helped this thing takes a long, long than expected. >> and we are friends. the united states and korea are friends. it seemed like a long time. >> as i mentioned, we're talking about further market opening in each country. there are some industries who have been negatively impacted with market openings. those industries are both in the united states and korea. they are not competitive enough. they will be negatively impacted. >> the koreans sell 700,000 cars
here per year. and the united states sells about 5000 or 6000 they are. >> less than 10,000. it is picking up. [laughter] >> so that is a tremendous imbalance. if the free trade agreement goes through, will koreans by -- i know that autos and beef, cosmetics and things like that have been sticking points. will koreans to buy american cars? that is what people want to know in the auto industry. >> right. the figures that you just mentioned, the 700,000 units of korean cars exported to the united states, that does not include about half of -- about half of those figures are not exported from korea.
half of those are manufactured in to local plants owned respectively by hyundai and kia motor companies. the rest are exported from korea to the united states. the tariff that is currently applicable to exports of u.s. automobiles to korea stands at 8%. >> ok. >> that means, if you buy a $30,000 car in korea, exported from the united states, then the tariffs amount to about $2,400. tremendous. >> that will go? >> that will go eventually. that means less expensive
american cars to korean consumers. >> psychologically, will koreans buy american cars? >> as a matter of fact, in the korean automotive market, last year, the foreign-made cars sold to the tune of almost 100,000 units. out of those 100,000 units, european cars account for the lion's share of that figure. about 70% were manufactured by european automakers. >> so now we're talking about getting into that mix american cars as well. >> it could be either adding to that market or it could be american cars taking up some
market share from european or japanese automakers. as i said, the 8% tariff applicable to the u.s. auto makers would be gone under the course european and japanese automakers will have to pay a% tariffs to their exports as a 8% tariff to their exports to the -- 8% tariff to their exports to the korean market. that will be a big boost for the increase of u.s.-made cars in korea. >> they put before off to the side. that is not involved in this free trade agreement. >> no. >> autos and beef were big sticking points.
the concern has always been that u.s. business would set up a broad and we will lose jobs here. that is a major concern because this country is hurting economically. we need jobs here. how do you answer that question? >> actually, this claim is not based on the fact that the u.s. will lose jobs to the korean people. >> which is the fact? >> the fact of the matter is that the u.s. made it quite clear on some occasions, in different studies done by the u.s. international trade commission, the fda is expected to support at least 70,000 new
jobs in the united states. >> how is that possible? >> that is possible simply because, under the agreement, u.s. exports to the korean market is expected to grow by as would lead tollion per year ext the creation of jobs in the united states. but there's more. much more than that, we are only talking about 70,000 jobs supported and created by the kor fta. there will also be the export of u.s. services to the korean market. it will go up dramatically.
particularly, for the united states, korea is the second- largest service market for u.s. services in asia after japan. the u.s. economy is supported by service industries to the tune of 70%. that means that the united states services industry is the most competitive in the world. >> when we talk about service industries, water or talking about? financial? >> financial services, banking services, express delivery services, i.t. services -- >> i get you. >> media, audio services. you name it. >> if somebody in america goes into by a samsung settled phone or in lg television set, will that benefit the american consumer?
>> definitely. >> how so? >> because, again, the average tariff -- u.s. tariff on you korean goods -- u.s. tariff on korean goods, when they enter the market, is somewhere around 3.5% or the 4% range. that translates into less expensive items. >> ok. >> where does this stand on the national assembly in korea? will it pass? >> we are talking about two different steps. the original one was signed in june 2007. that agreement as the standing committee of the korean national assembly some years ago. as you understand, last
december, we had an additional agreement which focused mainly on some amendments to the automobile chapter of the agreement. in order for us to deal with these two sets of agreement, they have withdrawn the original one from the national assembly. sometime this month, our government plans to submit the 2007 original agreement with the 200010 december agreement to the national assembly. that marks the beginning of the process to approve the u.s.- korea free trade agreement by the national assembly. >we have had to complete the approval process sometime later this year.
>> you are optimistic that it will pass. >> i am very much optimistic. i strongly believe that this will bring about tremendous benefits for curia as well as the united states. the strong momentum has been created, particularly following december of last year. as in the united states, korea requires a majority vote. korea has strong bipartisan support. almost every industry here in the united states embraced it. >> win-win? >> win-win. >> thank you for being here. >> thank you for having me. >> for online video of all " thisisamerica.net" programs, visit our website, thisisamerica.net.
"this is america" is made possible by -- the national education association, the nation's largest advocate for children and public education. the american federation of teachers, a union of professionals. poongsan corporation, forging a higher global standard. and the rotondaro family trust, the ctc foundation, afo communications, and the american life tv network.